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Beware of the hungry loan sharks

No matter how hard your situation is, never approach a loan shark for help.

Loan sharks are moneylenders who lure desperate individuals into borrowing money at extremely high interest rates. Borrowing money from them should be a big no even for just a short-term loan.

The dark side of loan sharks

The loan sharks try to be friendly to lure borrowers to fall into a trap. They usually:

Provide almost no paper work, and may take items as collateral such as passport, credit cards and driver’s licenses.

Decline to provide info regarding rate of interest, loan balances

Increase debt and interest rates without discussing with the borrower

Charge extremely high interests making it harder to pay

Pressure or even threaten borrowers until they borrow more money to repay another debt.

Check legitimacy of the lender

The Office of Fair Trading’s Consumer Credit Register has a list of licensed lenders, lenders with revoked licences, new applicants and lenders with suspended licences. Use the list to know if you should borrow from a particular lender or not.

Loan sharks are not above the law

Loan sharks do not have a right to recover any debt they claim because the loan is illegal in the first place. In fact, loan sharking is punishable as a criminal offence. Harassment, intimidation, threats and violence are signs of loan sharking.

Give information about a loan shark

You may give information about a suspected loan shark at the Gov.uk website.

Other loan options aside loan sharks

When you are in need of money but have low income, poor credit rating; there are still many available legit lenders. You just need to really look and ask around.

Credit unions

Help from the government

Aside from the government, there are so many other organisations, which can offer help.

In short, do not turn to a loan shark just because you cannot loan some money elsewhere. They may seem to be pleasant and affable at the outset but borrowing from loan sharks is not desirable anyway.